Interim Report January-September 2007

-            The realignment of Tele2 continued in the quarter, with a number of announcements concentrating the geographic footprint towards Eastern Europe and the Nordic region, focusing on infrastructure based operations

-           Operating revenue in Q3 2007 amounted to SEK 10,909 (11,014) million, or SEK 10,760 (10,016) million less divested companies an increase of 7 percent

-           EBITDA in Q3 2007 increased by 8.5 percent to SEK 1,844 (1,657) million excluding one-off items of SEK 0 (43) million, or increased by 15 percent to SEK 1,840 (1,594) million less divested companies

-           EBIT in Q3 2007 increased by 13 percent to SEK 851 (756) million excluding one-off items of SEK -242 (-2,416) million related to impairment of goodwill and other assets, as well as to gains/losses from divestments. Including one-off items EBIT amounted to SEK 609 (-1,660) million

-           Net profit/loss for Q3 2007 amounted to SEK -138 (-1,769) million affected by a write-down of tax assets amounting to SEK -599 million

-           Earnings per share, after dilution, for Q3 2007 amounted to SEK -0.25 (-3.92)

-           Operating revenue for the first nine months grew by 3 percent to SEK 32,967 (31,946) million

-           Net profit/loss for the first nine months amounted to SEK -134 (-1,253) million

-           Earnings per share after dilution for the first nine months amounted to SEK -0.07 (-2.58)

 

 

Lars-Johan Jarnheimer, President and CEO of Tele2 AB comments:

 

"Tele2 is running faster then ever. The realignment of Tele2 continued in the quarter with a number of announcements that concentrated our geographic footprint towards Eastern Europe and the Nordic region, but also important announcements of increased investments in countries including Russia and Norway. Our realignment process has this far mostly been visualized in the form of divestments of operations that we believe would not have met our internal financial targets. Concentrating our geographic footprint is only one leg of the process. The other leg is about securing our future success by investing and expanding in markets where we see great opportunities both for growth and enhanced profitability. We will focus on and develop our core businesses in order to stay best in class.

 

The number of corporate customers is rising and corporate sales represent 18 percent of group revenue. In addition to our already solid corporate customer base in Austria, the Netherlands and Sweden, we are stepping up our efforts in the SME segment in the Baltic countries and Russia, and we see great opportunities also in other countries.

 

Mobile telephony continued to deliver robust growth and profitability improvement in the quarter. Revenues grew by 17 percent and EBITDA improved by 29 percent compared to Q3 2006, with a net customer intake of 866,000. Once again, Russia was the biggest growth contributor although Sweden had a very strong quarter adding 100,000 new mobile customers. In Sweden, we are finally seeing a clear pick-up in mobile broadband and 3G services during the past two quarters. At the end of Q3 2007 we had 45,000 mobile broadband customers in Sweden. We intend to continue our push into the fourth quarter.

 

Tele2 now offers Broadband services in nine countries. Our continuing broadband operations, excluding Spain and Italy generated revenue growth of 8 percent, driven mainly by our services on own infrastructure. We see the broadband product as a good complement to our core mobile operations.

 

We still believe in the potential for fixed telephony and we strive to maximise value through broadband cross-selling and cost consciousness. Despite a revenue decline of 27 percent year-on-year as the market is in a structural decline, our EBITDA margin within fixed telephony remained stable at 13 percent in the quarter."

 

 

Further information can be obtained from:

Lars-Johan Jarnheimer, President and CEO, Tele2 AB, Telephone: +46 (0)8 5626 4000

Lars Nilsson, CFO, Tele2 AB, Telephone: +46 (0)8 5626 4000

Lars Torstensson, Investor Relations, Telephone: + 46 (0)8 5620 0042

Lena Krauss, Investor Relations, Telephone: + 46 8 5620 0045

 

 

Presentation details

A presentation to discuss the results will be held at 06.45 am UK time (07.45 am CET) in room Aulan, at SalénHuset, Norrlandsgatan 15, Stockholm. The presentation will be web-cast on Tele2's website www.tele2.com, along with the presentation material.

 

Conference call details

A conference call, with an interactive presentation, to discuss the results will be held at 15.00 (CET) / 14.00 (UK time) / 19.00 am (New York time), on October 24, 2007. The dial-in number is: +44 (0)20 7806 1957 or US: +1 718 354 1388. Please dial in 10 minutes prior to the start of the conference call to allow time for registration. A recording of the conference call will be available for 10 days after the call on: +44 (0)20 7806 1970 or US: +1 718 354 1112 with access code 6466395#. The conference call will be web-cast on Tele2's website www.tele2.com, with the possibility to enter questions online.